Latest news with #Vistra
CNBC
8 hours ago
- Business
- CNBC
This stock literally powering AI is setting up for a run to record levels, according to the charts
For this week's column, I was planning to do a simple analysis of the Nasdaq-100 showing a holding pattern that's been in place since May 13. Upon the completion of this consolidation, we should resolve to the upside testing the all-time highs — despite all the lingering macro headwinds. But when I learned about Meta Platforms signing a nuclear power deal with Constellation Energy , I decided to focus on the companies literally powering this revolution in artificial intelligence. I don't hold Constellation Energy, but I do own Oklo , GE Vernova , and Vistra in our Tactical Alpha Growth (T.A.G.) portfolio at Inside Edge Capital . As the AI buildout powers ahead, this will be one of the key drivers to break QQQ from the three-week consolidation setting up all-time highs. Today we're going to focus on Vistra Corp (VST), a stock that I also hold in our "fast money" account Active Opps with a 3.6% weighting. Based on today's news, many of the power generation and equipment suppliers are trading higher along with the semiconductors. I will increase my position size in VST to approximately 5% of my holdings in Active Opps based on the tactics I outline below. But first, let's talk about the company. Vistra is an integrated power generation and retail electricity company that has positioned itself in a pivotal role to support the AI technology buildout by filling the significant energy demands of AI-driven data centers. In 2024, Vistra acquired Energy Harbor for $3.4 billion — adding four nuclear power plants to its portfolio. Vistra has also made investments in natural gas assets as well as solar facilities, which allowed them to enter into power purchase agreements (PPA's) with Amazon and Microsoft. VST has grown revenue consistently since 2021 and GAAP EPS aggressively, until this year where analysts see a 11.79% contraction. Non-GAAP EPS is showing growth rates since 2022 of 378%, 88%, 54% and 43% according to S & P Global Capital IQ. The weekly chart shows nearby resistance in the $172-$177 zone. I would feel better increasing my position size if we can get a daily close above $180 setting up a test of all-time highs just below $200. Turning to the daily chart, we see a gap up today into our resistance zone following the Constellation-Meta news. If we can get a move into $180 this week, I will be looking to add to my position and consider the pivot point that is now support at $165 as my risk containment level. We offer active portfolio management and regular subscriber updates like the idea presented above. -Todd Gordon, Founder of Inside Edge Capital, LLC DISCLOSURES: Gordon owns VST personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
E&E News
2 days ago
- Business
- E&E News
How the AI rush is reshaping electric utilities
As electricity demand from the tech sector and manufacturing skyrockets, utilities are facing a stark reality: We're going to need a bigger fleet. And the pressure to add new generation quickly — and without imposing unrealistic costs on consumers — has the industry thinking about deal-making. 'There is a noticeable acceleration,' said Pavel Molchanov, an investment strategy analyst focusing on the utility sector for Raymond James. 'You can go back as far as you want and there have always been mergers and acquisitions in the electric power industry. But it is certainly accelerated by the universal recognition that the next decade and beyond will be a time of growth in electric power.' Advertisement Already this year, several power producers have reached into the market to vastly expand their gas fleets. Houston-based NRG, for example, said it would add 18 gas-fired power plants to nearly double the size of its current fleet in a $12 billion cash-and-stock deal with LS Power Equity Advisors. That came just months after NRG purchased six gas plants capable of producing 738 megawatts from Rockland Capital. Texas-based Vistra announced just days later its own deal to secure seven gas generators totalling 2,600 MW of capacity across five states from Lotus Infrastructure Partners. 'We believe natural gas fired generation will continue to play an ever-increasing role in the reliability, affordability, and flexibility of U.S. power grids for years to come,' said Vistra CEO Jim Burke in a statement on the $1.9 billion deal. He added that the 'attractive portfolio' of new gas assets would allow Vistra to meet growing power demand. In January, Baltimore-based Constellation said it would acquire Calpine Corp. in a $16.4 billion transaction, combining Constellation's nation-leading nuclear fleet with Calpine's fleet of 79 power generators that total some 27,000 MW of power. Canadian company Capital Power in April purchased two gas plants from LS Power for $2.2 billion, making it one of five North American independent power producers to have more than 10,000 MW of natural gas capacity. Earlier this month, TXNM, the parent company of New Mexico's largest utility, announced its acquisition by private equity firm Blackstone. The move, CEO Pat Collawn said, is designed to use an infusion of private capital to help TXNM build a lot more capacity without forcing customer bills to rise significantly. The operations may all have different details, but they share a common goal: getting as much reliable power on the grid as quickly as possible. And with supply chains for generation of all kinds, but especially gas, running behind schedule, Morningstar utilities analyst Travis Miller said that's forcing utilities to look anywhere they can. 'Utilities that need to serve load right away are going to have to do it with existing assets, whether it's theirs or someone else's,' Miller said. 'The recent moves are an attempt to be one of the first available suppliers for any kind of new load.' Utilities are facing unprecedented demand growth. A May report from consulting firm ICF projects that U.S. electricity demand will grow 25 percent by 2030 and 78 percent by 2050, compared with 2023 numbers. Meeting that, ICF said, would require utilities to double the pace of new generation. Other estimates have similarly said that data centers, electrification and onshoring of manufacturing could cause demand to rise at rates not seen in decades. While some utilities are looking to extend the life of their aging fossil fuel assets, many have had retirement plans in place for years. Building new plants is increasingly expensive and time-consuming as parts suppliers ramp up a supply chain that just years ago was in decline. According to Wood Mackenzie, it can take until 2030 for new gas plants to come online thanks to delays in the market. The analysts predict that about 890 gigawatts of new gas-fired generation will be added between 2025 and 2040, with nearly half of that in the U.S. and China. A May analysis by research firm Enverus notes that amid the 'sharp resurgence' of merger and acquisition action in the gas market, the per-megawatt cost of acquiring gas plants on the market has been running well above the $0.5 million average between 2021 and 2024. Yet the report found they're still cheaper than the estimated $2 million to $3 million it can cost to build each megawatt of new gas capacity. 'AI euphoria' That can be encouraging news to utilities already facing upward pressure on rates from the costs of maintaining infrastructure amid extreme weather and meeting new demand. Nationally, federal data shows that the average electricity price will rise 13 percent between 2022 and 2025, outpacing inflation. ICF says that nationally, rates could jump 15 percent to 40 percent between 2025 and 2030, depending on the market. A February report from consulting firm Deloitte said the growing need for capital combined with already rising utility rates means that regulated utilities are 'facing growing limitations' through the traditional method of raising funds. Retail electricity prices, Deloitte wrote, increased nearly 23 percent from 2019 to 2024 and utility requests for rate increases hit record highs between 2020 and 2024. That could make regulators skeptical of further rate increases. That, in turn, means that utilities are eyeing 'alternative funding avenues' such as mergers and acquisitions or infusions of private capital. Between 2016 and 2024, Deloitte found, the average annual investment in the power sector by private capital was up 113 percent compared with the previous eight-year period. The TXNM deal — which will see Blackstone invest $400 million in the short term while the sale is reviewed by regulators — is just the latest sign that Wall Street sees the electricity market as a growth sector. Earlier this year, private equity firm KKR acquired a stake in American Electric Power. On the renewables side, the climate investing arm of asset firm TPG made a $2.2 billion purchase of Altus Power, the largest commercial-scale solar owner in the U.S. In February, the U.K.'s National Grid divested its 3,100 MW of U.S. renewables in a sale to Brookfield Renewable Partners. Raymond James' Molchanov said that the 'AI euphoria' that has accelerated across the tech sector has reshaped the financial picture for the power sector in just a few short years. 'All generation assets have greater value than they did five years ago, or even three years ago,' he said. 'We understand that power demand is in growth mode for the next decade and beyond, and that means the entire category of assets, regardless of the type of generation, is a lot more in vogue.'
Yahoo
2 days ago
- Business
- Yahoo
PG&E restarts huge grid battery following Moss Landing fire next door
One of the biggest grid batteries in California has resumed operations following the cataclysmic Moss Landing fire in January. The San Francisco Bay Area's power grid used to draw on two battery storage plants in the quiet seaside town of Moss Landing. Texas-based power company Vistra built the nation's largest standalone grid battery on the grounds of an old gas power plant there, and utility Pacific Gas and Electric Co. built and owns the Elkhorn project next door. A roaring fire engulfed Vistra's historic turbine hall in January, wrecking rows of lithium-ion batteries that delivered 300 megawatts of instantaneous grid power. That site is still in shambles. PG&E's battery plant suffered far less disruption: Hot ash blew over the fenceline from Vistra's property, posing an environmental hazard and potentially clogging batteries' thermal management systems. But after several months of remediation, cleaning, and testing, PG&E was able to flip the switch Sunday to reconnect Elkhorn to the grid. That timing proved fortuitous, as it restored 182.5 megawatts/730 megawatt-hours of storage capacity into the power-hungry Silicon Valley grid corridor right before the region's first major heat wave of the summer. 'The concern was lower in the winter months, with demand lower,' said Dave Gabbard, vice president of power generation at PG&E. 'It will be critical to have assets like Elkhorn available as we get into the peak summer months.' Indeed, California has been building grid batteries at a record pace, to store the state's nation-leading solar generation and deliver it during crucial hours, like after sunset. The tech is displacing some gas-fired power generation in the state. California's battery fleet passed 15.7 gigawatts installed per a May tally, which Gov. Gavin Newsom's office touted as 'an unprecedented milestone.' The governor, a Democrat, did not specify why the 15.7-GW threshold merits particular attention, but it does mean California has added more than 5 GW since it crossed the 10-GW mark a year prior. 'The pace of construction for large-scale energy storage in California is phenomenal, the kind of accomplishment that was beyond our wildest dreams a few years ago,' said Scott Murtishaw, executive director of the California Energy Storage Alliance. The state's battery buildout is plowing ahead. But Vistra's fiery failure sparked deep community concerns about battery safety in California and beyond, as Moss Landing residents were forced to evacuate for several days and plumes of smoke loomed over surrounding estuaries and farmlands. In April, Vistra rescinded an application to build a 600-MW battery in Morro Bay, two hours down the coast from Moss Landing, following significant local resistance that intensified after the January fire. The reset at Elkhorn has rekindled concerns among community leaders who are still grappling with the fallout from the largest-ever battery fire in the U.S., and quite possibly the world. The Monterey County Board of Supervisors had asked to keep both battery plants offline until the Vistra investigation was completed and acted upon. 'Restarting operations before investigations are complete and before stronger emergency protocols are in place is disappointing and deeply troubling,' Monterey County Supervisor Glenn Church posted on Facebook after learning of PG&E's plans in early May. Crucially, PG&E's battery layout, completed in 2022, mitigates the hazards that took out the neighboring Vistra plant, which was completed two years earlier. Officials have not yet pinpointed the cause of Vistra's fire, but it became so destructive because it spread through the densely packed rows of batteries in the old turbine hall, igniting more and more fuel as it grew. By contrast, PG&E's Elkhorn plant spans 256 individual Tesla Megapack containers spaced over the property. 'We have a completely different design,' Gabbard said. 'We have compartmentalized our design so that fire propagation won't occur to adjacent units.' That industry-wide preference for separate, containerized systems doesn't eliminate the chance of battery fires, but it does limit the potential severity. One container might burn, but the fire can't reach all the other batteries. A fire could knock a facility offline temporarily, but it would only eliminate a small percentage of its capacity, Murtishaw said. That stands in contrast to Moss Landing's failure, or the all-or-nothing issues that can occur when a gas-burning turbine malfunctions. 'The technology and standards have changed considerably since the first big batteries,' like Vistra's, Murtishaw said. 'Facilities coming online now are being constructed with newer technologies meeting newer standards. Risk of runaway incidents has decreased dramatically relative to the amount of storage being deployed.' That compartmentalization strategy worked out when Elkhorn suffered its own battery fire in 2022 — the result of water seeping into a unit through an improperly installed roof, Gabbard said. The single unit burned in a contained fashion and did not spread to any other batteries. PG&E restarted the facility three months later, after implementing recommendations from an independent investigation into the cause. Since that incident, PG&E installed air quality monitoring onsite, and heat-sensing cameras that can automatically disconnect the site from the broader grid if they detect fire, Gabbard said. It also upgraded the battery enclosures to automatically discharge stored energy if abnormal behavior is detected. PG&E additionally updated its emergency action plan and instituted annual exercises with the North County Fire Protection District. When Vistra's plant burned up in January, the Elkhorn cameras spotted it and automatically severed the connection to the grid, halting the flow of high-voltage power out of the site. PG&E also made the air quality data available to emergency response teams. The utility then kept Elkhorn offline for the subsequent months to allow for environmental remediation of the soot to keep it out of local waterways, Gabbard said. Workers also cleaned the Megapacks 'outside and inside,' he noted. The main concern was that the ash could have intruded into the systems that cool batteries during operations. Staff pressure-washed all those components and tested their functionality to get the site ready for operations. Another 10 gigawatts of storage are already under contract for California's regulated utilities and community choice aggregators over the next four years, Murtishaw said. That would put the state over 25 gigawatts, well on its way to the current goal of 52 gigawatts by 2045, stemming from the state's clean energy law SB 100. To achieve that goal, the Moss Landing calamity needs to remain an outlier event. There's good reason to believe that will be the case. For one thing, the industry has all but abandoned Vistra's strategy of packing huge amounts of batteries into a single building. California now has 214 grid-scale batteries, and only about 10 of them reside in a building, Murtishaw noted. Those are subject to inspection by the California Public Utilities Commission under a recently expanded authority, he added; in the meantime, owners have stepped up safety measures in response to the Moss Landing news. Small-scale batteries in homes and businesses also count for California's top-line storage goal. They depend on the same core battery technologies as the large-scale storage projects, but as mass-produced consumer items, they go through a different gauntlet of tests before they reach customers. 'The home batteries are tested inside and out, up and down — they undergo rigorous safety testing and certification to standards,' said Brad Heavner, executive director of the California Solar and Storage Association, which advocates for rooftop solar and battery installers. In the state Legislature, Sen. John Laird, a Democrat from the Moss Landing area, introduced a bill in March to systematize coordination between battery owners and local emergency responders, and to fix a timing mismatch so California's fire codes match the latest standards set by the National Fire Protection Association. Murtishaw said the California Energy Storage Alliance supports the measure, which passed out of the Senate last week.
Yahoo
5 days ago
- Business
- Yahoo
VST Still a Top Pick Despite Price Cut, Says Evercore, Citing Strong EBITDA Path
Evercore ISI analyst Durgesh Chopra recently lowered the price target on Vistra Corp. (NYSE:VST) to $192 from $202 and kept an Outperform rating on the shares. Vistra operates as an integrated retail electricity and power generation company. In an investor note, the analyst noted that all of the major Independent Power Producers had reported their quarterly results over the last two weeks and for the most part IPPs faired relatively well during Q1 with strong adjusted EBITDA performance. The analyst expected the positive momentum to continue across the IPP coverage throughout the year. The advisory was slightly reducing price targets for Talen Energy and Vistra, primarily due to peer multiple contraction, the analyst noted. Solar panel workers installing a new farm for clean energy generation. The firm recently reaffirmed its 2025 adjusted EBITDA guidance range of $5.5 billion to $6.1 billion and its free cash flow before growth guidance of $3 billion to $3.6 billion. For 2026, the company remains confident in an adjusted EBITDA midpoint opportunity approaching $6 billion to $7 billion. Vistra sees durable demand growth across industries, particularly driven by AI and data center expansions. While legislative and regulatory clarity is awaited in Texas and PJM markets, the company expects these developments to unlock further opportunities. While we acknowledge the potential of VST, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than VST and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
VST Still a Top Pick Despite Price Cut, Says Evercore, Citing Strong EBITDA Path
Evercore ISI analyst Durgesh Chopra recently lowered the price target on Vistra Corp. (NYSE:VST) to $192 from $202 and kept an Outperform rating on the shares. Vistra operates as an integrated retail electricity and power generation company. In an investor note, the analyst noted that all of the major Independent Power Producers had reported their quarterly results over the last two weeks and for the most part IPPs faired relatively well during Q1 with strong adjusted EBITDA performance. The analyst expected the positive momentum to continue across the IPP coverage throughout the year. The advisory was slightly reducing price targets for Talen Energy and Vistra, primarily due to peer multiple contraction, the analyst noted. Solar panel workers installing a new farm for clean energy generation. The firm recently reaffirmed its 2025 adjusted EBITDA guidance range of $5.5 billion to $6.1 billion and its free cash flow before growth guidance of $3 billion to $3.6 billion. For 2026, the company remains confident in an adjusted EBITDA midpoint opportunity approaching $6 billion to $7 billion. Vistra sees durable demand growth across industries, particularly driven by AI and data center expansions. While legislative and regulatory clarity is awaited in Texas and PJM markets, the company expects these developments to unlock further opportunities. While we acknowledge the potential of VST, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than VST and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None.
